Allahabad High Court Monthly Tax Digest: February 2024
Upasna Agrawal
5 March 2024 8:30 AM IST
INDEXM/s K.J. Enterprises vs. State of U.P. and others 2024 LiveLaw (AB) 73M/s Globe Panel Industries India Pvt. Ltd. vs. State Of U.P. And Others 2024 LiveLaw (AB) 74Shri Durga Trading Co vs. Income Tax Officer And Another 2024 LiveLaw (AB) 75 The Commissioner, Commercial Tax, U.P. Lucknow v. S/S Cribhko Shyam Fertilizer Ltd. 2024 LiveLaw (AB) 77M/S Kronos Solutions India Private Limited...
INDEX
M/s K.J. Enterprises vs. State of U.P. and others 2024 LiveLaw (AB) 73
M/s Globe Panel Industries India Pvt. Ltd. vs. State Of U.P. And Others 2024 LiveLaw (AB) 74
Shri Durga Trading Co vs. Income Tax Officer And Another 2024 LiveLaw (AB) 75
The Commissioner, Commercial Tax, U.P. Lucknow v. S/S Cribhko Shyam Fertilizer Ltd. 2024 LiveLaw (AB) 77
M/S Kronos Solutions India Private Limited v. Union Of India And 4 Others 2024 LiveLaw (AB) 78
M/S John Oakey And Mohan Limited vs. The Commissioner Commercial Taxes U.P. Lucknow 2024 LiveLaw (AB) 91
The Commissioner Commercial Tax U.P. Lucknow vs. S/S. D.I.C. India Ltd. 2024 LiveLaw (AB) 94
M/S Yadav Steels Having Office vs. Additional Commissioner And Another 2024 LiveLaw (AB) 109
M/S Indeutsch Industries Private Limited v. State Of U.P. And 2 Others 2024 LiveLaw (AB) 110
M/S Akhilesh Traders v. State Of U.P. And 3 Others 2024 LiveLaw (AB) 111
M/S Rajansh Marble House Gomti Nagar Versus The Commissioner Commercial Tax U.P.Lucknow And Another 2024 LiveLaw (AB) 112
M/S Flipkart India Pvt. Ltd. Versus State Of U P And 4 Others 2024 LiveLaw (AB) 113
M/S Mansoori Enterprises Versus U.O.I. 2024 LiveLaw (AB) 116
M/S Gopi Chand Batra Traders v. State Of U.P. And 2 Others 2024 LiveLaw (AB) 124
ORDERS/JUDGMENTS OF THE MONTH
Case title - M/s K.J. Enterprises vs. State of U.P. and others
Case citation: 2024 LiveLaw (AB) 73
The Allahabad High Court has held that before taking any adverse decision under the Uttar Pradesh Goods and Service Tax Act 2017, an opportunity of hearing must be provided to the assesee even if there is no request on his part.
Relying on various decisions of the Allahabad High Court regarding the mandatory opportunity of hearing under Section 75(4) of the UPGST Act, Justice Shekhar B. Saraf held that “Even if no request is received from the person chargeable with tax or penalty, an opportunity of personal hearing must be granted if any adverse decision is contemplated against such person”
Case title - M/s Globe Panel Industries India Pvt. Ltd. vs. State Of U.P. And Others 2024
Case citation: 2024 LiveLaw (AB) 74
The Allahabad High Court has quashed the penalty which was imposed due to production of expired e-way bill at the time of detention. The Court held that no intention to evade tax was established by the authorities. Since, there was no dispute regarding consignor and consignee and the description of the goods, the Court held that penalty could not be imposed for a technical error in absence of any intention to evade tax.
Case title - Shri Durga Trading Co vs. Income Tax Officer And Another
Case citation: 2024 LiveLaw (AB) 75
The Allahabad High Court has held that under the new law, it is not necessary for the assessing authority to record “reasons to believe”. The Court held that the assessing authorities are only required to record bonafide satisfaction regarding escapement of income for assuming jurisdiction under the Income Tax Act, 1961.
The Court held that “under the amended law, it is no longer, the obligation of the Assessing Authority to record a "reason to believe", before assuming jurisdiction to reassess an assessee. A bonafide satisfaction reached as to escapement of income made suffice the test of valid assumption of jurisdiction.”
Case title - The Commissioner, Commercial Tax, U.P. Lucknow v. S/S Cribhko Shyam Fertilizer Ltd.
Case citation: 2024 LiveLaw (AB) 77
The Allahabad High has held that where assessee has paid far more tax than the input tax credit claimed, Section 13(1)(f) of the Uttar Pradesh Value Added Tax Act, 2008 will not apply.
“Upon perusal of the documents, the finding of the Tribunal seems to be crystal clear and leaves no room for doubt. The assessee has paid far more tax than the ITC claimed, and accordingly, the rigours of Section 13(1)(f) of the Act would not be applicable to the assessee. There does not appear any need for interference in the order passed by the Tribunal.”
Case Title: M/S Kronos Solutions India Private Limited v. Union Of India And 4 Others [WRIT TAX No. - 1417 of 2023]
Case citation: 2024 LiveLaw (AB) 78
The Allahabad High Court has held that the appellate authority exercising jurisdiction under Section 107 of the Central Goods and Service Tax Act, 2017 does not have the power to remand the case back to the adjudication authority. It only has the power to confirm or modify or annul the order under appeal.
Case Title: M/S John Oakey And Mohan Limited vs. The Commissioner Commercial Taxes U.P. Lucknow
Case Citation: 2024 LiveLaw (AB) 91
The Allahabad High Court has held that the principle of res-judicata does not apply from one assessment year to another. However, the Court held that the Department cannot be allowed to change its stance for the same assesee for different assessment years, unless there is a marked change from one year to another.
Relying on the decision of the Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India, Justice Shekhar B. Saraf held that
“One may of course keep in mind that in taxation matters, the principles of res-judicata do not apply squarely for one assessment year to the other. However, keeping in mind the doctrine of finality, unless there is a marked change from one assessment year to the other, the department cannot be allowed to take a different stand.“
Case Title: The Commissioner Commercial Tax U.P. Lucknow vs. S/S. D.I.C. India Ltd. 2024 LiveLaw (AB) 94
Case citation: 2024 LiveLaw (AB) 94
The Allahabad High Court has held the revision jurisdiction under Section 58 of the Uttar Pradesh Value Added Tax Act, 2008 is limited to questions of law, jurisdictional errors, or procedural. The Court held that the High Court must refrain from going into questions of facts which have been decided by the Tribunal.
“In exercise of revisional jurisdiction, the High Court has a limited mandate. The scope of revisional jurisdictional, is primarily focused on questions of law, jurisdictional errors, or procedural irregularities. The High Court in a revision petition must refrain from engaging in a de novo inquiry into factual matters already adjudicated upon by the Tribunal, unless compelling grounds warranting such intervention are made,” held Justice Shekhar B. Saraf.
Case Title: M/S Yadav Steels Having Office vs. Additional Commissioner And Another 2024 LiveLaw (AB) 109
Case citation: 2024 LiveLaw (AB) 109
The Allahabad High Court has rejected the application of Section 5 of the Limitation Act in appeals filed under Section 107 of the Uttar Pradesh Goods and Service Tax Act, 2017. The Court held that Tax laws are complete comprehensive codes which have strict procedural requirements to ensure revenue certainty and fiscal stability.
The Court observed that Section 107(4) provides for an extra one-month period over the prescribed three months for filing an appeal under Section 107 of the UPGST Act. Since the petitioner had filed the appeal after 66 days of expiration of the three months prescribed for filing appeal, the Court held that the delay could not have been condoned by the Appellate Authority.
Case Title: M/S Indeutsch Industries Private Limited v. State Of U.P. And 2 Others
Case citation: 2024 LiveLaw (AB) 110
The Allahabad High Court has held that in case of no discrepancies or clerical errors in the documentation, the initial burden to prove that there is intention to evade tax lies on the department.
While quashing penalty under Section 129 of the Uttar Pradesh Goods and Service tax Act, 2017, Justice Shekhar B. Saraf held that “It is a fact that the burden of proof lies on the petitioner in certain cases to show that there was no evasion of tax. However, when the error in the documents is only that of a clerical or typographical error, the initial burden of proof lies on the department to show there was intention to evade tax.”
Case title - M/S Akhilesh Traders v. State Of U.P. And 3 Others
Case citation: 2024 LiveLaw (AB) 111
The Allahabad High Court has held that absence of tax invoices and/or e-way bill at the time of interception and their subsequent production does not absolve the assesee from the liability of penalty under the Goods and Service Tax Act.
“Production of these documents subsequent to the interception cannot absolve the petitioner from the liability of penalty as the very purpose of imposing penalty is to act as a deterrent to persons who intend to avoid paying taxes owed to the Government,” held Justice Shekhar B. Saraf.
Case Title: M/S Rajansh Marble House Gomti Nagar Versus The Commissioner Commercial Tax U.P.Lucknow And Another
Case citation: 2024 LiveLaw (AB) 112
The Allahabad High Court has quashed the Commercial Tax Tribunal's judgement for non-compliance with Rule 63(5) of the U.P.V.A.T. Rules, 2008. The Court observed that, as per Rule 63(5) of the U.P. V.A.T. Rules, 2008, a judgement and appeal shall be in writing and shall state the points for determination, the decision, and the reason for the decision, which were not compiled by the Commercial Tax Tribunal while passing the judgement.
Case title - M/S Flipkart India Pvt. Ltd. Versus State Of U P And 4 Others
Case citation: 2024 LiveLaw (AB) 113
The Allahabad High Court has quashed the reassessment order against Flipkart and held that the burden to prove escaped assessment lies on assessing authority.
The Court observed that the burden of establishing the existence of recorded reasons was entirely on the department. Neither the petitioner was obligated to provide any material, nor was it required to assist in the formation of the reasons. Since the assessing authority wanted to assume the jurisdiction to reassess the petitioner for FY 2012–13, he took it upon himself to bring on record both the relevant material as may have led to the formation of a reason—to believe that any turnover had escaped assessment—and he further burdened himself to record the relevant reasons as to the belief of the escapement of turnover from assessment. The burden thus cast was not discharged.
Case title - M/S Mansoori Enterprises Versus U.O.I.
Case citation: 2024 LiveLaw (AB) 116
The Allahabad High Court held that according to the circular dated February 9, 2018 issued by the Government of India, Ministry of Finance, and Department of Revenue, the power of the Superintendent, Central Goods and Service Tax, and Central Excise is limited to the matter not exceeding Rs. 10,00,000, and in the present case, the amount involved is more than Rs. 16,00,000, and consequently, the order passed by it is without jurisdiction.
Case Title: M/S Gopi Chand Batra Traders v. State Of U.P. And 2 Others [WRIT TAX No. - 1632 of 2018]
Case citation: 2024 LiveLaw (AB) 124
The Allahabad High Court has reiterated that the search and seizure of a godown of an assessee cannot be penalised in proceedings under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017.
The Court relied on Mahavir Polyplast Pvt. Ltd. Vs. State of U.P. and 2 others, wherein a coordinate bench had held that
“The provision of Section 129(3) of the Act could not be invoked to subject a godown premises to search and seizure operation unmindful of the Act that no action was taken or contemplated under Section 67 of the Act, as that would have mandated existence of "reasons to believe", to subject that premise to search and seize goods or documents found therein.”
